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Question 3) How are foreign exchange transactions between international banks settled?
Question 4) What is triangular arbitrage?
Question 5) What does Trading foreign exchange mean ?
Question 6) Why should people trade Foreign exchange?

Dear Student,
Question 3 ) There is a interbank market which is a network of correspondent  banking relations, with large commercial banks maintaining demand deposit accounts with one another , called correspondent bank accounts .Through these correspondent bank accounts , foreign exchange transactions are settled between international banks .
Question 4 ) Triangular arbitrage is the process of trading out of the US  dollar into second currency , then trading it for third currency , which is traded for US dollars.
Question 5 )Trading in those transactions which involves currencies in foreign exchange market is called trading foreign exchange .
Question 6) People trade foreign exchange because of :
(i) accessibility
(ii)liquidity
(iii) global exposure
Hope this information will clear your doubts .
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Questions 3 :- The interbank market is a network of correspondent banking relationships, with large commercial banks maintaining demand deposit accounts with one another, called correspondent bank accounts.
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Questions 4:- Triangular arbitrage?(also referred to as cross currency?arbitrage?or three-point?arbitrage) is the act of exploiting an?arbitrage?opportunity resulting from a pricing discrepancy among three different currencies in the foreign exchange market.
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